How Do I Clear My Loans?

It is not uncommon to be in debt these days. Almost every person we see around has taken some personal loans in Singapore for a variety of reasons. Home loans, for example, are the most common types, followed by car loans, education loans, and medical loans. Then there are people who loans from finance institutions for personal use for any particular reason. Due to all of this, sometimes people find themselves burdened with multiple loans from different sources.

When there are multiple debts to be paid off, managing payments and installments can become difficult. You have to ensure that you are making payments to each one of your creditors regularly or face penalties for late payment. Even though the combined loan amount may seem manageable, repaying it back in pieces requires careful financial planning.

Debt Consolidation Loan

A debt consolidation loan can solve this problem and make debt management easier. These loans are very useful for those who are finding it difficult to manage all of their loans and debts. A debt consolidation loan can be used to pay off all other debts, and then continue to pay off the consolidation loan only. This way, there is only on debt to pay back, and not two, three or more.

When a person takes several loans, his or her credit rating can take a hit, thus affecting the person’s credibility in the eyes of financers. This can be avoided by taking a debt consolidation loan and making sure that the credit rating remains unaffected.

Securing a Debt Consolidation Loan

One can easily take a such loan from any of the financial services that provide such an option to customers. It is not difficult to secure such a loan, and can be taken to clear off all your existing debts in a single step. The interest rates are also on the lower side when you borrow against your property, which might probably be your home. Also, you get a longer period of time to repay this loan, so there is sufficient breathing space if you plan your finances accordingly.

Tips

When securing a consolidation loan, or any other loan, check if your lender allows early repayment of loans, and if so, then under what the terms. You can never know when you might be in a position where it becomes possible for you to repay your loans early and save a lot of interest. There is nothing early about being debt-free!

Author: Angelia Darren is a researcher & market analyst based in Singapore. Right now she is working on the behalf of Golden credit which is a fast cash Singapore.